e intend to use a three-step investment process comprised of three interrelated steps: an Initial Investment, Going Public Preparation, and finally a Follow-on Equity Investment.

The purpose of the Initial Investment, consisting of convertible debt or convertible preferred stock, is to cover the upfront costs (e.g. legal and audit fees) associated with going public. Warrants will typically be included as part of the Initial Investment and may also be included in the Follow-On Investment.

During the Going Public Preparation phase, Keating Capital intends to provide managerial assistance to prepare the prospective portfolio company for the eligibility and governance standards required by NASDAQ Capital Market. The most important component of this is to recruit (as necessary) a CFO with public company experience. At the same time, the portfolio company is responsible for preparing a registration statement.

The Follow-on Equity Investment, consisting of common stock, is contingent upon a portfolio company satisfying pre-established milestones towards the filing of a registration statement to go public. In conjunction with the Follow-On Equity Investment, the Initial Investment is also converted to common stock.